Businesses fail to convince consumers about security in IoT

The majority of consumers are still concerned about security when it comes to the Internet of Things (IoT), according to KPMG’s ‘Consumer Loss Barometer.’

The survey of more than 1,000 corporate executives and consumers aimed to understand the affects of cyber-security management on consumer confidence. It was carried out by Forbes Insights and KPMG, and released this summer.

The main conclusion drawn from the findings is that the majority of consumers (66 percent) are still concerned about cyber-security in the IoT.

This has led 32 percent of consumers to limit their use on certain IoT devices, a clear indication that they do not trust companies with their data.

That said, 61 percent of consumers would use more IoT devices if they had greater confidence in the security. Unsurprisingly, millennials are the most likely to increase their use (74 percent), while ‘Baby Boomers’ are more reluctant (47 percent).

Security presents a business opportunity

This would seem to present a clear business opportunity. If consumers can be convinced of the security of a device, businesses can sell more of them.

Yet, in spite of the fact that 70 percent of businesses admitted to experiencing a cyberattack in the last two years, only 51 percent have invested in security in the last year.

Admittedly, the reasons for this lack of investment are not given. Perhaps these companies feel their security is adequate, and that you can never be 100 percent secure. This is not unreasonable, but then businesses should be focussing on reassuring the consumer.

Which sectors are most affected?

Greater security is particularly important for companies specializing in the automotive sector, according to KPMG. 82 percent of consumers would either be highly wary or would never buy again from a brand that suffered a cyberattack.

This is an industry that is only going to face further scrutiny as mainstream connected cars become a reality. While just 49 percent of consumers worry about being hacked now, that figure rises dramatically to 70 percent by 2021.

Consumers in other sectors may be more forgiving, according to Gary Silberg, Americas head of automotive, KPMG LLP.

“The statistics show that financial services customers are relatively forgiving in the event of a security breach: make amends and they will stay,” he said.

So why are automotive customers more fickle?

“This points to a maturity/awareness curve: customers in banking are accustomed to hearing about security whereas in automotive, they may not even be aware of the risks. Accordingly, the risks and costs of a misstep may be greater in auto than for many more ‘tech-mature’ industries.”